Market Overview

Uninterrupted supply and lacklustre global demand are weighing on international coal prices, with little relief in sight.

Despite attractive coal-fired generation margins, environmental policies in Europe and China are providing a grim outlook for the abundantly available fuel.

While mining cuts may eventually provide a lift to coal prices, continuous global economic struggles are likely to keep them subdued for the foreseeable future. The downside is limited, however, as current prices provide only the slimmest of profit margins for coal producers around the world.

Miners in Australia and South Africa have already started to cut production to boost prices, however, this is yet to have a lasting effect on coal prices, which continue to hover around historic lows.

Methodology

ICIS price assessments are based on information gathered from a wide cross-section of the market, comprising consumers, producers, traders and distributors from more than 250 reporters world-wide. Confirmed deals, verified by both buyer and seller, provide the foundation of our price assessments.

Our in-depth market knowledge drives our specialist focus, as we recognise the importance of individual market dynamics and not a one-size-fits-all approach.

Over 25 years of reporting on key chemicals markets, including Coal, has brought global recognition of our methodology as being unbiased, authoritative and rigorous in preserving our editorial integrity. Our global network of reporters in Houston, London, Singapore, Shanghai, Guangzhou, Mumbai, Perth and Moscow ensures unrivalled coverage of established and emerging markets.

About Coal

Coal was generated in the Carboniferous Period starting around 360 million to 290 million years ago through the build up of silt and other sediments. Tectonic movements in the earth’s crust buried swamps and peat bogs to great depths, exposing the materials to a change in temperature and pressure.

Coal’s key characteristics are calorific value, its moister content, its ash content, its volatile content and its sulphur content although these can vary greatly, depending on the area where it is mined.

Coal is used primarily for electricity generation and steel manufacturing. The type of coal used for electricity generation is usually referred to as steam or thermal coal, while coal used for steel manufacturing is metallurgical coal or coking coal. The main difference between the two is in the calorific value, with typical calorific value of steam coal at 6,000kCal/kg.

Lignite or brown coal is also often used for electricity production but its calorific value is usually much lower than that of thermal coal. Lignite is usually produced and used domestically and any international trade is negligible.